Dwayne Golden, who pleaded guilty to conspiracy to commit fraud, has been sentenced in a Brooklyn federal court.
Scheme Participants and Their Activities
Dwayne Golden, along with co-defendants Gregory Aggesen, Marquis Egerton, and William White, backed three fraudulent digital asset firms: EmpowerCoin, ECoinPlus, and Jet-Coin. These companies promised investors guaranteed returns through overseas cryptocurrency trading, yet operated as a Ponzi scheme, using funds from new investors to pay older ones. The scheme was active from April to August 2017, after which the operators vanished with the funds, leaving investors with losses.
Sentencing and Consequences
Dwayne Golden, a 57-year-old from Pennsylvania, has been sentenced to 97 months in prison for orchestrating a $40 million Ponzi scheme. His co-defendant William White received a 30-month sentence while Aggesen and Egerton await sentencing. Investors who lost funds in this Ponzi scheme can submit restitution claims through the FBI portal.
Rise of Ponzi Schemes in the Cryptocurrency Space
In recent years, Ponzi schemes have surged, capitalizing on the hype and complexity of digital assets. These scams often promise high returns, using funds from new investors to pay early ones. The volatility of cryptocurrencies and potential for high returns attract investors, making them vulnerable to schemes promising quick profits. The lack of regulations and complexity of crypto create a prime target for fraudsters, raising concerns over user and trader security.
Dwayne Golden's case illustrates how Ponzi schemes continue to exist in the cryptocurrency space despite the rising popularity of digital assets and the challenges investors face.
